Zespri’s Tim Clarkson discusses crisis management and learning from difficult seasons

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Zespri’s Tim Clarkson discusses crisis management and learning from difficult seasons

In just two decades, Zespri has become the leading marketer of kiwifruit in the world, producing over 160 million trays of the fruit every year. 

Tim Clarkson, chief strategy officer for the New Zealand-based company, spoke about Zespri’s journey, challenges, and objectives during the 2024 Global Cherry Summit in Santiago, Chile. He explained that the success of the company has come hand in hand with crisis management strategies, developed through years of experience. 

One of Clarkson’s lessons, he explained, has been to never waste a good crisis. He said that pulling themselves together and learning during periods of crisis has allowed the industry to stimulate positive change. 

Zespri is divided between 3,000 growers, who are the only shareholders of the company, as well as a marketing department, and a post office organization that competes for the growers’ business. 

“We all work together with a common goal, which is to grow the kiwifruit category around the world,” Clarkson said. 

This year, Zespri projects total production of 180 million trays of kiwifruit from its 15,000 hectares planted in New Zealand and elsewhere.

Kiwifruit is the largest horticultural export from New Zealand.

Today, 2,843 kiwifruit growers produce approximately 184 million trays for export from 13,610 productive hectares. In 2021/22 this was worth $2.911 billion in gross sales.

Zespri's History

Zespri is successful at managing crises in part thanks to the fact that it was born in response to one. 

The joint effort of kiwifruit growers in New Zealand started in the 80s when oversupply led growers to bankruptcy as they did not have markets to sell their fruit to. They decided to create a brand that could distinguish New Zealand kiwifruits in various markets, and that’s when Zespri was born. 

Hort16a, the first gold variety from Zespri’s nursery program, accelerated growth, as licensing of the variety supported their innovation strategy. 

Global sourcing of kiwi, starting in Italy, allowed the company to establish a year-round supply, solidifying its market presence.

Facing challenges

As the industry grew, new challenges started to appear. In 2010, the PSA bacterial disease hit, killing kiwifruit vines and devastating Hort16a production. Clarkson said the industry rallied in action to rebuild and withstand the challenge. 

That same year, Zespri was prosecuted for underpayment of customs duties in China. 

“The industry was again in the depths of despair,” Clarkson said. “But thankfully, thanks to our breeding program and investment of innovation, a new variety was waiting in the wings.”

That variety was Zespri's SunGold, with more PSA resistance, a long storage life, great taste, and consistent size and quality. 

Between 2010 and 2015, the company accelerated the release of this new variety, rapidly replacing old vines with SunGold.

In 2015, the company came out with an ambitious goal of doubling the size of the business by 2025.

“We will hit that target of $4.5 billion NZ dollars in sales revenue, despite Covid and all the other challenges,” said Clarkson. 

Zespri also focused on its offshore growth during that period, with 5,000 new hectares in Europe, Korea, and Japan. 

This expansion has allowed the company to supply fresh produce aisles year-round with consistent quality. Clarkson said that consistency is how you achieve brand recognition in the eyes of the consumer.

Today, Zespri ships about one-third of its crop to greater China, another third to Asia-Pacific, and the final third to Europe and North America. 

Lessons and progress

Like all fresh products, kiwifruit is susceptible to weather conditions that can alter fruit quality and total volume. Zespri confronted this reality in 2022, placing the company in crisis-management mode once again.

Clarkson explained that quality is at the heart of the Zespri brand, so when the company suffered fruit quality issues that season, the industry was quick to respond and defend its reputation. 

“It was only thanks to very strong partnerships and our customers who stood by us and understood the issues that we got through it. But we knew we had to get it right the next year,” Clarkson said. 

Then in 2023, Cyclone Gabrielle, along with frosts at budding time, caused a massive fall in production volumes. 

Related article: Zespri’s 2022-23 financial results reflect one of its “toughest-ever seasons”

“But, again, with Zespri's brand strength, the demand created ahead of supply, we were able to give excellent returns in 2023 on lower volumes,” Clarkson said. 

The executive recognized this as a success story, marked by many challenges along the way. 

“If there's one message I would like to leave you,” Clarkson said, “ it is to manage demand ahead of supply.”

By planning in advance and establishing strong partnerships, he said the industry can confront conflict or supply disruptions better and more prepared.

Strategy behind the success 

Clarkson listed three factors behind Zespri’s success. First, he pointed to their purpose, which is to help people, communities, and the environment around the world to thrive through the goodness of kiwifruit. 

Secondly, their mission is to create sustainable, long-term value for kiwifruit growers, by offering consumers the world’s leading portfolio of branded kiwifruit 12 months of the year.

Lastly, he listed the company’s values of commitment to guardianship and working as custodians for future generations. Those values include being goal-oriented and pushing all members of the industry to step up. 

The collective strength of the industry coming together is what Clarkson said has made them passionate about the product.

Looking forward

Looking ahead to the next ten years, Clarkson said they see some very positive trends that could benefit the category. 

People are becoming more and more aware of eating healthy, he said, and kiwifruit’s status as a superfruit could drive growth into new areas.

“The middle class is growing worldwide, which is ideal for us,” he said. “Kiwifruit makes up just 1% of the fruit bowl, so there is plenty of room for growth if we can get our message across to the consumer.”

Clarkson added that growing into new sectors will mean taking action - before the competitors do it first.

2024 season

New Zealand just had its picking season and kiwifruits are already on their way to markets all around the world. 

Clarkson told FreshFruitPortal.com that it has been a good year for the crop, and the weather has been “kinder” than last year. 

Out of the 180 million trays expected for this season, two-thirds of it will be of Zespri’s own SunGold variety. 

He said volume to the greater China area will be up 30% this year, a big jump from the lower volumes seen in 2023.

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